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Thursday, September 04, 2008

School Funding Switches Sides Of The Street

While Memphis City Council gets all the attention for its new policy on Memphis City Schools funding, Shelby County Board of Commissioners has also changed the budgetary playing field for public education.

Apparently, financial watchdogs for the districts didn’t notice a change in the traditional way that county government funds Memphis City Schools and Shelby County Schools. For the first time in the memory, no specific tax rate was set for schools.

For example, in the past, when the Shelby County Board of Commissioners set a tax rate at $4.04, it set a specific amount, say $2.02, for schools. County government is source of 30% of Memphis City Schools Budget and even more of Shelby County Schools, and because of it, the change could produce a new budget reality for the districts in coming years.

A Penny Here, A Penny There

That’s because when there was a specific tax rate, the funding produced by it automatically grew each year as a result of the increase in the “value of the penny,” or in non-bureaucratese, the amount that a penny of the property tax rates produces as the assessment of property in the county increases. If the tax base grew by 3%, schools realized a 3% increase regardless of their academic results, their financial management and their priorities.

But now, the Board of Commissioners has voted that the county budget for schools is a specific budget amount, just like other government agencies, and as a result, increases in school funding only take place when the commissioners vote in favor of them. The change already seems apparent. In the last fiscal year, the county property taxes allocated to schools totaled $361,288,000, the same amount that was in the adopted budget for 2008-2009.

With 59% of all county property taxes going to schools, it’s hard to argue that the board of commissioners is shirking its commitment to education, but they do seem clearly to be putting it on a level playing field with all other county services.

Double Standard

Because of its allocated part of the total property tax rate in the past, schools often got a free pass in the budget process, while other vital public services – such as health care, The Med, and juvenile justice – had to argue and justify every dollar they received.

Some of the impetus for the change by the commissioners is probably the result of a growing interest in having a stronger voice in public education and a deepening interest in accountability, but more to the point, it likely reflects deepening concern in Shelby County Government that the assessed property valuation for our county will actually go down next year.

It’s a possibility that compounds the regular pressures on Shelby County budgets caused by the mountain of debt and the need for more funding for safety net programs. It’s also worth remembering that state law requires county government to fund schools at no less than the previous year’s budget, so even if the valuation goes down, the commissioners can’t reduce the budgeted amount for schools as it cuts other services.

The Big Chill

Unsurprisingly, Shelby County Schools reacted with their customary bluster. Board member Joe Clayton, in response to suggestions that Superintendent Bobby Webb should meet with county officials to discuss a compromise, said county schools need “to make sure they (county officials) understand that we’re not going to roll over and play dead.”

Generally, it’s Shelby County Schools board members’ opinion that it’s the rest of the world that should always roll over for them. Meanwhile, Superintendent Webb said incredulously that: “We don’t need a shell game here. People think they’re paying taxes for education, but it’s actually being shifted somewhere else.”

It’s the kind of rhetoric that’s seems aimed at stirring up the county board’s political base, but it’s more likely to chill the already cool relationship between Shelby County Schools and its primary funding source. The sign of the times is that these days, criticism of the district is just as likely to come from the Republican side of the house as Democrats.

Doing Their Job

More to the point, it’s just hard to figure out how Mr. Webb sees the board of commissioners’ action is as misleading the public. We’re willing to bet that outside of county government and the school districts, there were precious few people that even knew that property tax funds were coming from a dedicated allocation of the tax rate. Or cared.

Mr. Webb said that taxpayers think they’re paying taxes for education. And that’s true, except we don’t think. It we know it - all of us are paying taxes for schools whether it’s a fixed amount or certain amount of the tax rate.

And there’s a certain arrogance in the notion that the Shelby County Board of Commissioners – who are charged by law with setting the county budget and the county tax rate – is somehow being less than honest in doing exactly what they are elected to do.